easyJet calls for air tax trap relief

11 December 2006

According to easyJet, millions of UK air travellers have been caught in a tax trap by the Chancellor—Gordon Brown’s—dash to tax the airline industry in Wednesday’s Pre-Budget Report.easyJet has written to HM Treasury urging Gordon Brown to clarify the tax rules for those passengers who have already purchased flights for travel after 1st February 2007.

According to the Chancellor’s statement, the new APD bands will apply to all flights from that date. Yet millions of air travellers have already booked their flights at the previous levels of APD. The arrangement for these passengers is unclear and any attempts to claw back tax could even be illegal under Section 30 of the Finance Act 1994. Not only are UK travelers affected but millions of inbound European tourists could get a nasty surprise when they arrive in the UK and are presented with another tax bill.

easyJet is urging the Chancellor to introduce the new regime for all tickets bought after 1st February 2007.

Andy Harrison, easyJet Chief Executive, said:

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“In his Pre-Budget Report, Gordon Brown mugged millions of air travellers and now has made the matter worse.

“As the Government have already acknowledged, APD is a blunt tax. We say that it is the wrong tax for the economy and the wrong tax for the environment. Not all airlines are the same. easyJet flies brand new aircraft with high passenger loads which mean that we emit 30% fewer emissions per passenger kilometre than a traditional airline. It is simply daft that our passengers should pay the same level of APD as the less efficient airlines and even dafter that freight aircraft that fly mange tout from Thailand are not being taxed at all!

“In his rush to grab the extra £1.2 billion of tax, the Chancellor has created confusion with millions of passengers facing a retroactive implementation of the increase in APD. The Chancellor’s proposal is akin to asking drinkers to pay extra tax on the wine which they bought a few weeks ago, but have not drunk yet.” ——-